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Glamour Don'ts and Credit Dos

I can deny my big-hair phase all I want, but Equifax knows the truth. While the box of never-again-to-be-revealed snapshots from the 1980s is now under lock and key, proof of payment for the "Glamour Don't" years is still in my credit file.

There, in chronological splendor, is a rundown of such fashion affronts as the acrylic neon blouson deep V-neck sweater craze, and the Limited Express store charge card that made it possible.

By now, half of the nation has had the opportunity to take a stroll down memory lane and peek into their credit files, thanks to a federal law that requires the three major credit reporting bureaus to give up the goods for free once a year. Got any credit don'ts in your file? Here's how to pretty them up:

1. Don't be unfashionably late. More than one-third of your overall credit score is based on your bill-paying habits. Late payments can have brutal consequences, particularly any recent tardy slips. So don't skip any bills -- certainly not your rent or your mortgage payment. Send in just the minimum amount due if you have to, but send something. And certainly don't add insult to fashion injury by defaulting on any debt, even if it was for stirrup pants and a gold lame halter top. If you know your payment will be late, call your lender and explain, and he might give you a free pass just this once.

2. If you can't afford the bling, don't buy it. You might have a $15,000 credit limit on your card, but that doesn't mean that's how much you can afford to spend on loud prints and uncomfortable shoes. Keep your debts to 35% or less of your credit limits. Red flags start waving when your debt-to-available-credit ratio exceeds 50%. Living within your means counts for a whopping 30% of your score.

3. Hold on to the wardrobe classics in your closet. There's something to be said for the classic black dress and the cashmere twin set. Their presence in your closet is comforting. Same goes for your older credit accounts -- lenders like to see that you've built some history. If you're going to close some accounts, cancel newer ones, since the old ones help establish your long and illustrious credit record. (Here are a few pointers on picking cards to cancel.) Your borrowing history determines 15% of your overall credit score.

4. Don't chase every sale. Pick a trend and stick with it -- at least for a while. When you apply for lots of shiny new credit, lenders tighten their purse strings and fire a few warning shots at your credit score. Still, new credit applications have just a 10% impact on your score. So if you're trying to pay off debts, shopping around for the best deal makes sense. (We Fools call this "snowballing.") But remember, every line of credit you apply for will stay on your record for at least seven years, even if the account is open for only a day or two. So take great care when opening and closing accounts, and when wearing a new look to a wedding. After all, those shots of your experimental punk phase will be passed around for generations.

5. Fashion icons are not created overnight.People with the highest credit scores have a proven past with all different kinds of credit -- installment loans (like a car loan or mortgage) and revolving debt (your workaday credit card). Buying your way into a boosted score (paying interest, an annual fee, or other costs of borrowing) just isn't worth it. If your score is 750 or higher (on a range from 300 to 850), you probably already qualify for the best rates. This measure counts for just 10% of your overall score. Remember, time and responsible bill-paying habits matter the most.

These days, your credit score can affect a lot more than just your interest rates (and marriage prospects). Insurers check it to set the insurance premiums on your car and home. Potential employers use it to help them size you up. A lot of folks have the keys to your credit file. Each time a potential lender or insurer checks, a "hard inquiry" is recorded in your file. (When you or an employer accesses the file, it's a "soft inquiry" and has no effect.) Occasionally check your credit report to make sure that those who are being nosy have a right to be.

Remember, first impressions count. And stirrup pants were never a flattering choice.

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